'Lebanon to go ahead with privatisation plans

Lebanon could raise its economic growth forecast for 2010 to as high as 8 percent if structural reforms and long-stalled privatization plans are implemented, Finance Minister Raya al-Hassan said on Tuesday.

We believe the potential could be upward to 7 or 8 percent, Hassan told Reuters Insider Television.

However, this is contingent on addressing the deep-seated structural deficiencies in the economy and this could happen through implementation of structural reforms and through privatization, Hassan added.

She said the government had forecast only 4.5 percent growth in this year's budget because it wanted to be conservative.

She said the government would go ahead with plans to privatize the electricity and telecoms sector, which have been delayed as some powerful politicians have long opposed plans to liberalise the two sectors.

The sale which will help Beirut tackle massive public debt which stands at 148 percent of GDP would take place late this year at the earliest, the minister said.

The government should also have a final settlement early next week on the refinancing of $1 billion worth of Eurobonds maturing in March, she said.

We're going ahead with privatization, including the telecoms sector for broadband and for cellular, Hassan said. I'm reluctant to tell you that for sure it's going to be this year.

I can tell you for sure that it will be soon may be towards the end of 2010, or beginning of 2011, she said. However, Hassan said a former telecoms ministers estimate in 2007 that the sale of the two state mobile firms would generate up to $7 billion was on the high side.

Saddled with massive public debt of $51 billion, Lebanon is one of the most highly indebted countries in the world.

Hassan said the government should have a final settlement early next week on the refinancing of $1 billion worth of Eurobonds maturing in March.

Blom Bank, Fransa Invest Bank and BNP Paribas have been mandated to lead manage the issue.

We have been witnessing strong interest in our sovereign paper and therefore we expect that to go very well as was evident in the last Euro bond issuance that we issued in early 2010, Hassan said.

When the next Euro bond maturity is due in November, Hassan said either an exchange would be considered before then or refinancing at the time of maturity.

Asked whether any fresh Euro bonds would be issued in 2010 in light of the country's burgeoning debt problems, Hassan said: We are considering all our options.

We definitely have to look at all our alternatives for rescheduling or restructuring our debt and therefore we're going to see how we're going to do that, she said. But our interest rates have been steadily going down and therefore, we think our debt servicing burden is also going down and with privatisation coming soon, some of the proceeds will go toward writing off some of the debt outstanding, Hassan said.